Baltimore Joins Global Movement, Becoming the First Major U.S. City to Ban Water Privatization

The global movement to stop privatization deals and expand public ownership just scored a huge victory in Baltimore, as residents voted overwhelmingly to ban putting their water in private hands.

Thomas M. Hanna November 12, 2018

Baltimore residents voted 77 percent to ban water privatization. (Joe Sohm/Visions of America/UIG via Getty Images)

On Novem­ber 6, Bal­ti­more became the first major city in the Unit­ed States whose res­i­dents vot­ed to ban water pri­va­ti­za­tion. Near­ly 77 per­cent of vot­ers cast bal­lots in favor of Ques­tion E, which declared the inalien­abil­i­ty” of the water and sew­er sys­tems and exempt­ed them from any city char­ter pro­vi­sions relat­ed to fran­chis­ing or oper­a­tional rights.

The decades-long and seemingly unassailable neoliberal “consensus” of globalization, economic liberalization, privatization, austerity and monetary orthodoxy is now facing a deep legitimacy crisis.

This vote result­ed from an ongo­ing strug­gle waged by Bal­ti­more com­mu­ni­ty activists, unions and civic lead­ers demand­ing afford­able access to water for low-income res­i­dents. That strug­gle emerged in response to con­cern the city could sell off the community’s water infra­struc­ture to for-prof­it investors. 

The vote is also part of an emerg­ing world­wide move­ment to fight back against pri­va­ti­za­tion and to munic­i­pal­ize or re-munic­i­pal­ize (put under pub­lic con­trol) local enter­pris­es and ser­vices. Between 2007 and 2014, the num­ber of pri­vate­ly owned water sys­tems in the Unit­ed States fell by 7 percent.

As in Bal­ti­more, the mere threat of water pri­va­ti­za­tion now sparks com­mu­ni­ty resis­tance around the world. A 2017 study by the Ams­ter­dam-based Transna­tion­al Insti­tute iden­ti­fied 835 munic­i­pal­iza­tions and re-munic­i­pal­iza­tions involv­ing some 1,600 cities in 45 coun­tries. These devel­op­ments were most preva­lent in the ener­gy and water sec­tors, but have also occurred in trans­porta­tion, edu­ca­tion, hous­ing and health­care. These (re)municipalizations gen­er­al­ly suc­ceed­ed in bring­ing down costs and tar­iffs, improv­ing con­di­tions for work­ers and boost­ing ser­vice qual­i­ty, while ensur­ing greater trans­paren­cy and account­abil­i­ty,” the report found.

In Ger­many, dozens of new munic­i­pal-lev­el pub­licly owned elec­tric util­i­ties have been estab­lished since 2007 and hun­dreds of ser­vice con­ces­sions have been acquired by pub­lic enti­ties from pri­vate oper­a­tors, revers­ing the pri­va­ti­za­tion wave that swept the sec­tor in the 1990s. This process of rekom­mu­nal­isierung (‘re-com­mu­nal­iza­tion’) is part of a larg­er effort called energiewende (“ener­gy tran­si­tion”) to replace the country’s use of coal and nuclear with renew­able sources.

In Boul­der, Col­orado, a sim­i­lar effort by civic and com­mu­ni­ty lead­ers has been under­way for sev­er­al years to take the local elec­tric util­i­ty into pub­lic own­er­ship for ener­gy tran­si­tion reasons.

In the Unit­ed King­dom, the Labour Par­ty under the lead­er­ship of Jere­my Cor­byn and John McDon­nell has made revers­ing pri­va­ti­za­tions and re-estab­lish­ing pub­lic own­er­ship a major pol­i­cy pil­lar. The par­ty now unapolo­get­i­cal­ly calls for rena­tion­al­iza­tion of the rail­ways, the ener­gy sys­tem, the water sys­tem and Roy­al Mail, as well as the estab­lish­ment of a pub­licly owned Nation­al Invest­ment Bank, a net­work of region­al pub­lic devel­op­ment banks and new local pub­licly owned banks. Dozens of British cities are estab­lish­ing new pub­licly owned ener­gy com­pa­nies as local alter­na­tives to the big cor­po­rate sup­pli­ers in order to low­er costs for res­i­dents and address the issue of fuel poverty.

Such rena­tion­al­iza­tion and remu­nic­i­pal­iza­tion efforts are being dri­ven by grow­ing frus­tra­tion with privatization’s fail­ures. Recent­ly, a Labour Par­ty study revealed that rail­road pri­va­ti­za­tion in the UK has cost tax­pay­ers £5 bil­lion a year and result­ed in 20 per­cent high­er fares for rid­ers (on top of dete­ri­o­rat­ing ser­vice qual­i­ty). Sim­i­lar­ly, in 2017, a report found that pri­va­ti­za­tion of the Eng­lish water sys­tem was not only cost­ing res­i­dents £2.3 bil­lion per year, but pri­vate water com­pa­nies were financ­ing invest­ments almost exclu­sive­ly with debt and had extract­ed near­ly all of their post-tax prof­its as dividends.”

Many Amer­i­cans recall the Chica­go park­ing meter pri­va­ti­za­tion fias­co, which every year gets worse: Pri­vate investors reap hun­dreds of mil­lions in prof­its while park­ing rates rise expo­nen­tial­ly and the city faces decades of lost rev­enue. (The pri­va­ti­za­tion was so cat­a­stroph­ic that it helped scut­tle an unre­lat­ed attempt to pri­va­tize Chicago’s Mid­way Airport.)

Pri­va­ti­za­tion crit­i­cisms are also com­ing from unex­pect­ed sources. In Octo­ber, the Inter­na­tion­al Mon­e­tary Fund (IMF) issued a report sug­gest­ing that the sup­posed fis­cal ben­e­fits of pri­va­ti­za­tion are often mere­ly an illu­sion” — they increase rev­enue and low­er deficits but also reduce the government’s asset hold­ings.” This report came on the heels of anoth­er from the Unit­ed Nations rap­por­teur on extreme pover­ty and human rights that was even more damn­ing. Pri­va­ti­za­tion,” Philip Alston sum­ma­rized, often involves the sys­tem­at­ic elim­i­na­tion of human rights pro­tec­tions and fur­ther mar­gin­al­iza­tion of the inter­ests of low-income earn­ers and those liv­ing in poverty.” 

Such pro­nounce­ments are fur­ther evi­dence that the decades-long and seem­ing­ly unas­sail­able neolib­er­al con­sen­sus” of glob­al­iza­tion, eco­nom­ic lib­er­al­iza­tion, pri­va­ti­za­tion, aus­ter­i­ty and mon­e­tary ortho­doxy is now fac­ing a deep legit­i­ma­cy cri­sis. His­to­ry may mark the turn­ing point as the Great Finan­cial Cri­sis of 2008. A high­ly-lever­aged and implod­ing finan­cial sec­tor that threat­ened to bring down the entire glob­al econ­o­my laid bare the myth of free-mar­ket and pri­vate sec­tor infallibility.

Mean­while, in the Unit­ed States, pub­lic own­er­ship — espe­cial­ly at the local and state lev­el — remains vibrant and broad­ly pop­u­lar. Amer­i­cans inter­act with pub­lic own­er­ship every day — from local, low-cost pow­er and var­i­ous modes of trans­porta­tion to land, hous­ing and schools. Even for those who believe neolib­er­al talk­ing points about gov­ern­ment being the prob­lem” and pri­vate busi­ness being supe­ri­or, as Bal­ti­more demon­strates, there is usu­al­ly lit­tle appetite for the han­dover of, say, a pub­licly owned elec­tric or water util­i­ty or a pub­lic trans­porta­tion sys­tem to extrac­tive, for-prof­it corporations.

Re-munic­i­pal­iza­tion efforts around the world offer an oppor­tu­ni­ty to build upon this base of sup­port. Com­mu­ni­ties can con­nect their grow­ing aware­ness of the pow­er of pub­lic own­er­ship to emerg­ing move­ments mobi­liz­ing around eco­nom­ic democ­ra­cy, water secu­ri­ty, local con­trol and cli­mate jus­tice to affect far-reach­ing, sys­temic change.

Thomas M. Han­na is Direc­tor of Research at The Democ­ra­cy Collaborative.
Limited Time: